Quarterly report pursuant to Section 13 or 15(d)

FAIR VALUE MEASUREMENTS

v2.4.0.8
FAIR VALUE MEASUREMENTS
6 Months Ended
Oct. 31, 2013
Fair Value Measurements  
FAIR VALUE MEASUREMENTS
NOTE 7 - FAIR VALUE MEASUREMENTS
 
As defined by the ASC, fair value measurements and disclosures establish a hierarchy that prioritizes fair value measurements based on the type of inputs used for the various valuation techniques (market approach, income approach and cost approach). The levels of hierarchy are described below:
 
Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities.
 
 
 
Level 2: Inputs other than quoted market prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets, such as interest rates and yield curves that are observable at commonly-quoted intervals.
 
 
 
Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions, as there is little, if any, related market activity.
 
The following table summarizes the financial liabilities measured at fair value on a recurring basis as of October 31, 2013, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:
 
 
 
 
Quoted Prices in
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Increase (Reduction)
 
 
 
 
Active Markets for
 
 
Significant Other
 
 
Significant
 
 
 
 
 
 
 
 
in Fair Value
 
Balance Sheet
 
 
Identical Assets or
 
 
Observable Inputs
 
 
Unobservable
 
 
October 31, 2013
 
 
April 30, 2013
 
 
Recorded at
 
Location
 
 
Liabilities (Level 1)
 
 
(Level 2)
 
 
Inputs (Level 3)
 
 
Total
 
 
Total
 
 
October 31, 2013
 
Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liability - secured convertible notes
 
$
-
 
$
-
 
$
-
 
$
-
 
 
3,088,756
 
$
1,598,536
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liability - warrants
 
$
-
 
$
-
 
$
-
 
$
-
 
 
3,858,508
 
$
(764,786)
 
 
The table below sets forth a summary of changes in the fair value of the Company’s Level 3 derivative liabilities related to the senior secured convertible notes and warrants for the period ended October 31, 2013, prior to reclassification to an equity instrument as a result of the Amendment and Note Amendment.
 
October 31, 2013
 
 
 
Notes
 
Warrants
 
 
 
 
 
 
 
 
 
Balance at beginning of year
 
$
3,088,756
 
$
3,858,508
 
Reduction in derivative instruments from note exercise
 
 
(686,856)
 
 
-
 
Change in fair value of derivative liabilities
 
 
1,598,537
 
 
(764,786)
 
 
 
 
4,000,437
 
 
3,093,722
 
Reclassification of derivative liabilities to additional paid-in capital
 
 
(4,000,437)
 
 
(3,093,722)
 
Balance at end of period
 
$
-
 
$
-